Federal Circuit Reverses the TTAB's Denial of Opposition to Trademark Registration

Case: China Healthways Institute, Inc. v. Xiaoming Wang, Fed. Cir., Case No. 2006-1464 (June 22, 2007)

The One Sentence Summary: The Federal Circuit reversed the TTAB's denial of an opposition to registration of trademark on the ground that viewed in their entirety, the marks CHI and CHI PLUS are likely to cause confusion as to the source of the products associated with those marks.

What They Were Fighting About: China Healthways Institute, Inc. ("Chi Institute") sells electric therapeutic massagers under its trademark CHI. Xiaoming Wang, a competitor, applied for the registration of the mark CHI PLUS for "electric massage apparatus." Chi Institute opposed Wang's trademark application on the ground that the two marks are so similar that there is a likelihood to cause confusion or mistake.

Federal Circuit Holdings: The TTAB's denial of Chi Institute's opposition is reversed.

• The TTAB erred in excluding CHI, the common and major component in both marks, from its analysis. "It is incorrect to compare marks by eliminating portions thereof and then simply comparing the residue."
• While the word "CHI" has a meaning in Chinese traditional medicine, it does not mean "electric therapeutic massager." The Federal Circuit thus rejects the TTAB's conclusion that the CHI component of the marks is at least highly suggestive, if not merely descriptive, when used in connection with electric massagers.
• The addition of the word "PLUS" in Wang's mark is unlikely to avoid confusion, because adding the word "plus" usually indicates that the product is a superior version of an earlier version, not a product from a different source.
• The TTAB erred in giving little weight to Chi Institute's evidence of large sales volume and length of use of the mark. Despite lack of evidence of market share, evidence regarding volume of sales, advertising and length of use is highly relevant and should have been considered.
  
  

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Jury Verdict for Copyright Infringement of Format of Yacht Listings Affirmed By 11th Circuit

Case: Buc International v. Yacht Council Limited No. 04-13653 (11th Cir. 6/21/07)

The One Sentence Summary: A jury verdict finding copyright infringement of yacht listings using plaintiff's registered arrangement of headings was affirmed.


What They Were Fighting About: Defendant created a new yacht listing service that included many copies of listings in plaintiff's yacht listing service. Plaintiff had a copyrighted format for arranging yacht information. The jury found for plaintiff.

Eleventh Circuit Holdings:

• Plaintiff's compilation of yachts for sale was sufficiently original to warrant copyright protection.
• Plaintiff which created standard headings for yacht listings was entitled to protection for this arrangement despite the fact that third party yacht brokers filled in the yacht information because 98% of yacht listings included the protected headings.
• The doctrine of merger did not prevent protection for plaintiff's selection of headings for description of a yacht. There were other ways to select and arrange the information about a yacht, so protection of plaintiff's format was allowed.
• The judge properly instructed the jury that it must find "substantial similarity" rather than "virtual identicality" between the plaintiff's work and the infringing work.
• Defendant waived its right to seek a "virtual identicality" instruction due to its late request and failure to submit the written proposed instruction.
• In deciding defendant's claims seeking a declaratory judgment claim that the copyright was invalid, the judge was bound by the jury's verdict that the copyright was valid.
  

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Utah’s Trademark Protection Act: Prohibiting the Use of Trademarks to Return Competitors’ Ads on the Internet

Utah’s Trademark Protection Act, which was signed into law in March, would allow individuals or business to register an “electronic registration mark.” If a mark were registered, it would be illegal to sell and/or deliver Internet advertising associated with that mark for goods or services of the same type or where the advertisement would likely cause confusion between the registrant of the mark and the advertiser. The statute would allow challenges to search engines which sell advertising to be displayed when users perform a search on a competitor’s mark. Both the search engine and the advertiser would face liability under the Utah law. The Utah Division of Corporations' web site indicates that the registration database is still under development.



Originally slated for April 30, 2007, implementation of Utah’s law was delayed after Google, Yahoo, Microsoft, AOL and other Internet companies met with state officials. See Utah legislators back off keyword search bill, May 14, 2007. Reports of a June 30, 2007 implementation date have appeared in the press, along with conjecture among bloggers that the law will be repealed. Such conjecture is based both on the influence of the Internet companies and on the opinion by Utah’s Office of Legislative Research and General Counsel that the law is likely unconstitutional due to conflict with the Commerce Clause. See Legislative Review Note ("Because of the potential impact on interstate commerce from the state's regulation of electronic registration mark use on Internet search engines, this legislation has a high probability of being held to be unconstitutional.")

As noted above, the webpage for Utah’s Division of Corporations & Commercial Code indicates that the database to support the Trademark Protection Act is under development. The site also notes that additional information will be provided when the database is complete.

(Thanks to Elaine Meckenstock for her assistance on this post).

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Patent Attorney Excluded from USPTO Practice for Participation in Patent Filing Scheme

Case: Bender v. Dudas, No. 06-1243 (Fed. Cir. 6/21/07)

The One Sentence Summary: The panel affirmed the district court's summary judgment order upholding a disciplinary action by the USPTO director to exclude a patent attorney who violated ethical rules by participating in a patent promotion scheme where design patents were filed for inventors despite their desires to have utility patents.

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Patent Not Barred By The Public Use Doctrine Where The Only Use Occurred During A Test

Case: Motionless Keyboard Company v. Microsoft Corporation, Nokia Inc., and Saitek Industries Ltd., Case No. 2005-1497 (Fed. Cir. 5/29/2007)

The One Sentence Summary: Defendants did not infringe patent on thumb-actuated keyboard where their keypads were not in a concave depression, but the patent was not invalid under the "public use" bar where the only use of the keyboard to transmit data prior to the critical date was for a speed test and the tester signed a non-disclosure agreement.


What They Were Fighting About: Plaintiff Motionless Keyboard Company ("MKC") sued Microsoft, Nokia, and Saitek, alleging they infringed two patents it owned. Patent No. 5,178,477 claimed an ergonomic keyboard designed to accommodate the architecture of the human hand. Patent No. 5,332,322 - a continuation in part of the '477 patent - claimed a hand-held device that frees the thumb to actuate the keys in multiple and differentiated ways. The sole inventor of both the '477 and the '322 patents invented the novel ergonomic keyboard technology as an independent inventor without the benefit of a well-funded laboratory. He showed a prototype model of his keyboard technology to potential investors with whom he signed non-disclosure agreements, and to a friend who did not sign a non-disclosure agreement. He showed the model more than one year prior to filing his patent applications. However, he did not use the prototype model to transmit data to a computer. He also showed the model to a typing tester, who was the only one to use the device to transmit data, and then only on one occasion during a test of the model. The test occurred more than one year before the patent application filing date. The typing tester signed a non-disclosure agreement.

The District Court found, on cross motions for summary judgment, that none of the defendants infringed any of the patents. With respect to the '322 patent, the District Court held that the limitations of Claim 1 required that the keyboard must be within a concavity formed by a depression in the housing of the device, and that all keys comprising the keyboard must be contained entirely within the concave area and sunk below the surface of the housing, so that thumb movement occurs within the concave area. The defendants' devices did not meet these limitations. The District Court also found both patents invalid as a matter of law under the "public use" bar of 35 U.S.C. Section 102(b), and held that the inventor had admitted that the '322 patent was invalid for obviousness by filing a terminal disclaimer to make the '322 patent coterminous with the '477 patent.

The inventor appealed the district court's invalidity determination, and its determination of no infringement of the '322 patent, but did not appeal the determination of no infringement of the '477 patent. The Federal Circuit affirmed the non-infringement determination, but reversed the invalidity determination.

Federal Circuit Holdings:

• The District Court's claim interpretation and summary judgment findings are reviewed de novo.


• The District Court's construction of Claim 1 as requiring a keyboard housed entirely within a concave area formed by a depression in the housing was correct given (1) the plain language of the claim which required "a concavity in said housing at said key-actuation position, and a thumb-associable cluster of keys forming a keyboard within said concavity;" (2) given that the specification stated that "a keyboard is positioned in a concavity or depression in the housing;" and (3) given that the patent drawings all showed renderings of the keyboard featuring a concavity in the housing of the device with a keyboard totally within the concavity.


• The plaintiff could not survive the grant of summary judgment of non-infringement by equivalents because it did not provide "particularized evidence and linking argument as to the insubstantiality of the differences between the claimed invention and the accused device, or with respect to the function, way, result test." The plaintiff had failed to present particularized evidence that links the accused products to the patent on a limitation by limitation basis, and thus could not avoid summary judgment on its claim of infringement by the doctrine of equivalents.


• Given that all of the disclosures, except the one-time typing test, visually displayed the keyboard design without putting it into use and given that the entry of data never occurred outside of testing and the tester signed the NDA, no one ever used the model to transmit data in the normal course of business. Therefore, the disclosures in the record did not rise to the level of public use.


• A terminal disclaimer is not an admission that a later-filed invention is obvious. Thus, the trial court erred in holding that the '322 patent was invalid due to obviousness.

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Ninth Circuit Reverses Denial of Retailer's Motion for Preliminary Injunction in Trademark Infringement Case

Case: Abercrombie & Fitch Co. v. Moose Creek, Inc., No. 06-56774 (9th Cir. 5/22/07)

The One Sentence Summary: District court erred in denying Abercrombie & Fitch's motion for a preliminary injunction against Moose Creek's use of new marks by (1) misapplying the doctrine of judicial estoppel, and (2) erroneously concluding that the parties' trademarks were more different than similar.


What They Were Fighting About: Abercrombie & Fitch filed suit in August 2005 against Moose Creek for alleged trademark infringement, unfair competition, and false designation of origin under the Lanham Act and various California common law claims, one year after the parties settled a 2004 trademark infringement suit brought by Moose Creek. In the later action Abercrombie contended that Moose Creek's two new logos, a moose silhouette and a moose outline, infringed on Abercrombie's similar marks. Abercrombie moved to enjoin Moose Creek's use of its new marks pending resolution of the lawsuit. District court denied Abercrombie's motion because it concluded that (1) a number of Abercrombie's arguments were contrary to its positions in the prior litigation and therefore barred by judicial estoppel, and (2) differences between the parties' marks outweighed the similarities.

Ninth Circuit Holdings: The Ninth Circuit reversed and remanded the case to the district court for reconsideration of Abercrombie's motion for a preliminary injunction, because:

• Applying the Sleekcraft factors regarding likelihood of confusion, the district court abused its discretion in finding that Abercrombie was judicially estopped to assert arguments about the strength of Moose Creek's marks and the degree of care likely to be exercised by the purchaser.
• The district court also erred in estopping Abercrombie from arguing post-purchase confusion as a ground for trademark infringement.
• Judicial estoppel does not apply where the party's later litigation position is not "clearly inconsistent" with its earlier litigation position.
• With respect to the third Sleekcraft factor - similarity of the marks - the district court clearly erred in concluding that differences between the parties' marks outweighed similarities. District court erroneously relied on comparisons to Moose Creek's marks as they appeared in a catalog, rather than as they appeared embroidered on the company's apparel in the marketplace. Ninth Circuit noted that "marks must be considered in their entirety and as they appear in the marketplace."

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Court Orders Preservation and Production of Server Log Data from RAM Citing New E-Discovery ESI Rules

Case: Columbia Pictures Industries v. Bunnell, No. CV 06-1093 (C.D. Cal. 5/29/07)

The One Sentence Summary: Server log data from computer RAM showing user requests for data should be preserved and produced in copyright infringement action.


What They Were Fighting About: Plaintiffs sued Bit Torrent for enabling and inducing copyright infringement with its web site. Plaintiffs sought to require Bit Torrent to preserve and produce server log data from its servers showing IP addresses of users requesting dot-torrent files, requests for dot-torrent files, and the times and dates of the requests.

Central District of California Holdings:

• Server log data in computer RAM which showed web site user file requests was electronically stored information (ESI) subject to production under Rule 34 of the Federal Rules of Civil Procedure.
• The court rejected defendants' argument that they were not required to produce documents that did not exist. The data existed in fixed form in computer RAM and could be produced.
• Defendants had control over the data even though a third party, Panther, operated servers for defendants under contract.
  
• A preservation order for the evidence was justified by the court's concern for maintaining evidence and the irreparable harm likely to plaintiffs if the evidence was not preserved.
  
• A preservation order requiring defendants to preserve and produce the server log RAM data was not unduly burdensome on defendants. Setting the server log switch to log was trivial, and the alternate method of writing a script program to capture IP addresses would not impose an undue burden. Defendants overestimated the volume of server log data by presenting testimony on the logging of all data handled by the server.
• The court rejected privacy concerns raised by defendants because the production order would require masking of user IP addresses.
• Defendants' privacy policy could not stop entry of a preservation order.
• Retention of the server log data would not violate a First Amendment right to anonymous use of the Internet if such a right exists.
• Production of the server log data did not violate the Stored Communication Act, 18 U.S.C. §§ 2701 - 2711, because defendants were the intended recipients of the server requests and could consent to producing it.
• The Wiretap Act, 18 U.S.C. §§ 2510-22, did not prevent disclosure of the Server Log data because the server log was not a transmission, and the statute did not relieve defendants of the duty to preserve and produce the data.
• The production of the server log data would not violate the Pen Register Statute, 18 U.S.C. §§ 3121-27 because the capture of IP addresses by the providers of electronic communications services such as defendants is exempt from the statute.
• Defendants' argument that production of server log data would destroy good will and drive away customers was speculative, and mitigated by the masking of IP addresses in the court's order.
• DMCA subpoenas were not an alternative for getting the data, and plaintiffs were not required to use them.
• Privacy laws of the Netherlands did not prevent preservation and production. The Panther data was in the United States and not subject to Netherlands law. Moreover, the IP addresses did not identify persons as required under the Netherlands law. Finally, a foreign statute did not block an American court from ordering preservation.
• Sanctions under F.R.C.P. 37 were not warranted for defendants' failure to preserve the server log data before entry of this order.
  
  

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Copyright Office Properly Rejected Application for Registration of Appraiser Web Site and Maps

Case: Darden v. Peters, No. 06-1177 (4th Cir. 5/24/07)

The One Sentence Summary: The Copyright Office did not abuse its discretion in denying website creator's application for copyright registration of website and maps featured on website because additions made to U.S. Census maps were not sufficiently original to merit copyright protection.

What They Were Fighting About: William Darden, creator of "appraisers.com" website, applied for copyright registration of the website and a separate registration for the various maps of the United States featured on the website. The Copyright Office rejected his applications because Darden's addition of labeling, relief, coloring and shading to the U.S. Census digital maps was not sufficiently original and creative to merit copyright protection. The Copyright Office Board of Appeals affirmed the rejection of his applications.

Darden brought a claim against the Register of Copyrights under the Administrative Procedure Act ("APA"), seeking judicial review of the decision of the Copyright Office to deny registration of his copyright claim. The district court granted the Register's motion for summary judgment, finding the Copyright Office did not abuse its discretion in rejecting Darden's copyright applications.

Darden appealed the district court's decision, claiming the de novo standard of review should have been applied.

Fourth Circuit Holdings:

• The Court rejected Darden's argument that copyright registration is a constitutional right meriting the de novo standard of review under the APA, 5 U.S.C. section 706(2)(B).


• The Court refused to set aside the Register's decision as "contrary to law" because Darden failed to identify any relevant factors or legal principles that the Register did not consider in making its decision.


• The Court rejected Darden's claim that his applications were sufficiently original because his addition of labels, coloring and shading to preexisting maps lacked the minimum level of creativity required for copyright protection. The Court refused to consider evidence that Darden's customers associated the maps with his company because if a work does not merit copyright protection when it is created, it will never merit protection.


• The Court affirmed the district court's grant of summary judgment in favor of the Register, finding that the Copyright Office did not abuse its discretion in rejecting Darden's applications for registration of his maps and website.
  
  

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California Court Allows Claim of Failure to Indemnify for Patent Action to Proceed in State Rather Than Federal Court

Case: Linear Technology Corp. v. Applied Materials, No. H028343 (Cal. App. 6th Dist. 6/18/07)

The One Sentence Summary: Plaintiff could pursue claims of breach of contract and failure to indemnify in state rather than federal court against sellers of equipment who refused to indemnify plaintiff against patent infringement claims, but plaintiff did not state a claim on fraud, deceit and Bus. & Prof. Code § 17200 unfair competition claims.


What They Were Fighting About: Linear had been sued by TI in federal court for patent infringement arising out of Linear's use of equipment sold by the defendants in this case. Linear's third party federal court complaint against the defendants sought indemnity, but was dismissed in federal court as not related to TI's patent suit. Linear brought the claim again in state court, and defendants successfully demurrered, claiming the breach of contract suit had to be brought in federal court because it involved patent law questions, and the fraud deceit and unfair competition claims failed to state a cause of action.

Cal. Sixth District Holdings:

• The trial court erred in granting the demurrer on the failure to indemnify claims. The breach of contract and indemnity issues could be resolved without requiring the state court to rule on a necessary issue of federal patent law. Thus, 28 U.S.C. § 1338 did not require the indemnity claims to be brought exclusively in federal court.
  
• The trial court properly dismissed the claims for fraud and deceit and unfair competition under the UCL, California Business and Professions Code § 17200. Defendants had no duty to disclose the existence of earlier patent litigation in selling their equipment to TI. As to the UCL claims, Linear had no standing as a corporate plaintiff to pursue unfair competition claims on behalf of other corporations that could assert their own rights.
  

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Corresponding Structure for Claimed "Means" Must Be Disclosed In Specification Despite Knowledge of One Skilled in the Art

Case: Biomedino, LLC v. Waters Technologies. Corp., No. 2006-1350 (Fed. Cir. 6/18/07)

The One Sentence Summary: Patent claims were invalid due to indefiniteness when they failed to recite structure corresponding to claim of "control means."


Federal Circuit Holdings:

• A claim using the language "control means" was subject to means-plus-function analysis as it did not convey structure to one of skill in the art.
• Using means-plus-function claiming as allowed by 35 U.S.C. § 112 ¶ 6 requires that the corresponding structure be disclosed and identified in the specification.
• It is not enough that one of skill in the art would be able to implement a structure. Rather, "one of skill in the art [must] understand the specification itself to disclose a structure." A bare statement that known techniques can be used is not sufficient.
  
  

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Check Boxes and Drop Down Menus Provided by Internet Roommate Matching Service Open It to Discrimination Claims

Case: Fair Housing Counsel v. Roommate.com, Nos. 04-56916, 04-57173 (9th Cir. 5/15/07)

The One Sentence Summary: A divided Ninth Circuit panel held that Section 230 of the Communications Decency Act ("CDA"), 47 U.S.C. § 230, did not provide immunity from discrimination claims to an Internet roommate matching service which provided functions of "categorizing, channeling and limiting the distribution of users' profiles" and thereby became responsible for developing at least in part the discriminatory content.


What They Were Fighting About: Roommate.com was sued for discrimination claims arising from its web site that provided forms for users to state roommate preferences and allowed freely structured comments.

Ninth Circuit Holdings:

• Defendant Roommate.com was an "information content provider" as defined in 47 U.S.C. § 230(f)(3) and not entitled to immunity because it provided drop down menus and check boxes that allowed users to express discriminatory preferences.
• Providing a space for unstructured comments in which users stated discriminatory preferences was protected by immunity under CDA section 230 because defendant did not alter the content.
  
  

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Compilation CD Could Reproduce Magazines in Context

Case: Greenberg v. National Geographic Society, No. 05-16964 (11th Cir. 6/13/07)

The One Sentence Summary: With the exception of an introductory sequence using one of plaintiff's copyrighted images, a compilation CD of National Geographic magazines did not violate the copyright of a photographer who contributed photographs.


What They Were Fighting About: Plaintiff had contributed photographs to National Geographic magazines, and sued for copyright infringement upon publication of a compilation CD. An earlier decision of the Eleventh Circuit had found that infringement had occurred and remanded for determination of damages.

Eleventh Circuit Holdings:

• The reproduction in context of National Geographic magazines on a compilation CD did not infringe the copyrights of a photographer who contributed photographs to some of the magazines. The republication of the magazines was a privileged republication of the collective work allowed under 17 U.S.C. § 201. The panel held that its earlier ruling in the case finding liability, Greenberg v. Nat'l Geographic Soc'y, 244 F.3d 1267 (11th Cir. 2001), had been overruled by the Supreme Court's decision in New York Times Co. v. Tasini, 533 U.S. 483 (2001).


• As to an introductory sequence on the CD that incorporated a magazine cover with one of plaintiff's photographs, the district court erred in striking defendant's defenses, and that claim was remanded.
  
  

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The First Circuit Finds That Private Dealings Between Businesses Can Compromise A Trade Secret

Case: Incase, Inc. v. Timex Corporation, No. 06-1577 (1st Cir. 5/24/2007)

The One Sentence Summary: To protect a trade secret, a company must take affirmative steps to protect its information from the party against whom the misappropriation claim is made.

What They Were Fighting About: Incase, Inc. (“Incase”) a watch-case-maker, sued Timex Corporation (“Timex”), a watch-maker, alleging that Timex took its design and had it made by a foreign manufacturer, displacing Incase. Incase alleged misappropriation of trade secret, unfair trade practices, breach of contract, and implied contract.

In the Massachusetts District Court, Incase won jury verdicts on misappropriation of trade secret, breach of contract, and implied contract. The District Court, though, granted judgment as a matter of law (“JMOL”) to Timex on the trade secret and implied contract claims. In a subsequent bench trial, the district court also found that Timex had committed unfair and deceptive trade practices, but denied Incase punitive damages.

In the First Circuit case, Incase appealed the JMOL and the denial of punitive damages. Timex cross-appealed on denial of its motion for JMOL on the remaining claim and on the unfair and deceptive trade practices holding. Timex also appealed the denial of its motion for a new trial. The First Circuit affirmed the District Court decisions in all respects.

First Circuit Holdings:

• The panel held that the district court properly dismissed the trade secret claim because there was no evidence that the plaintiff took reasonable steps to preserve the secrecy of its design. Incase did not share its design with the public, but it did share it with Timex. The Court was not swayed by the plaintiff’s testimony “that when Incase works on a project, it is treated as ‘confidential between Incase and the company’” because the plaintiff also admitted “that this policy was never articulated to Timex.” The Circuit quoted a Massachusetts Supreme Court decision when it stated, “Protecting a trade secret calls for constant warnings to all persons to whom the trade secret has become known and obtaining from them an agreement, preferably in writing, acknowledging its secrecy and promising to respect it.”


• In order to protect a trade secret, one must take reasonable affirmative steps to protect the secrecy of a design, not only from the public, but also from the party against whom the misappropriation claim is made.


• As to the other claims, the implied contract/unjust enrichment claim, based on the work that Incase did in preparation for manufacturing the watch cases, was properly dismissed because under Massachusetts law, the only proper measure of damages is “value for services,” and the plaintiff could offer no estimate of the cost of design services distinct from the cost of the packaging it sold.


• Defendant's secret use of plaintiff's designs to negotiate a contract with the Philippine manufacturer was found to be sufficiently unscrupulous to sustain the unfair trade practices claim, but because the defendant's conduct was not willful, the punitive damages claim was properly denied.


• Finally, the court found that the district’s denial of a motion for a new trial was not an abuse of discretion.

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Illegal Copies of Software Allowed License Fee Damages Despite Claim that Defendant Would Not Have Licensed the Copies

Case: Thoroughbred Software Int’l v. Dice Corp., et al., No. 06-2080 (6th Cir. 6/14/07)

The One Sentence Summary: The plaintiff was allowed to obtain license fee damages based on illegal software copies despite claims that the defendant would not have licensed the copies.


What They Were Fighting About: Defendant had created unauthorized copies of plaintiff's software as revealed in an audit. The district court refused to award license fees or defendant's profits for unused copies of the software, and plaintiff appealed.

Sixth Circuit Holdings:

• Under 17 U.S.C. § 504, licensee who created unauthorized software copies was liable for actual damages of the license fee for each copy despite its argument that it would not have purchased the copies had it been required to pay.
• Plaintiff was not entitled to an award of defendant's profits when plaintiff failed to produce evidence allocating how much of defendant's revenues were attributable to plaintiff's software.
• Plaintiff's dismissal of alternate theories of recovery did not prevent it from being a "prevailing party" for an award of attorneys' fees under 17 U.S.C. § 505.
• The district court erred in denying attorneys' fees because plaintiff had not fully prevailed. The panel remanded for the district court to consider whether fees should be awarded to plaintiff.
  
  

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Preliminary Injunction Dissolved Due to Prior Art Raising Invalidity Questions

Case: Entegris, Inc. v. Pall Corp., (Fed. Cir. 2004-1440, 2005-1265, -1266, 2006-1374 6/13/07)

The One Sentence Summary: The panel rejected challenges to a district court's contempt order enforcing a preliminary injunction and its order dissolving the preliminary injunction.


What They Were Fighting About: The district court held defendant in contempt for violation of a preliminary injunction, but dissolved the preliminary injunction in light of prior art that potentially invalidated the patents.

Federal Circuit Holdings:

• The Federal Circuit did not have jurisdiction to consider an appeal from an interlocutory district court order finding defendant in contempt for violation of a preliminary injunction.
• The district court acted within its discretion in dissolving the preliminary injunction in light of prior art that raised substantial questions as to validity of the patents at issue.
  
  

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Seventh Circuit Finds That Owner of Copyrighted Work Cannot Dictate How the Work is Used and That Federal Rules Recognize Claim Pleading

Case: Vincent v. City Colleges of Chicago, No. 06-3082 (7th Cir. April 30, 2007)

The One Sentence Summary: Summary judgment against Plaintiff was affirmed where Plaintiff argued that Defendants should not be allowed to use her book to teach a course; however, the district court’s order to dismiss portions of Plaintiff’s complaint for failure to adhere to fact pleading was reversed.


What They Were Fighting About: Plaintiff wrote a how-to book on real estate transactions and registered her copyright in that work. She gave Defendants an oral license to publish the work. In 2001, Plaintiff told Defendants by phone, fax and letter to stop publishing her work. Nonetheless, Defendants continued to reproduce and use her book as a teaching text. Plaintiff sued for copyright and trademark violations. The district court dismissed most of Plaintiff’s complaint under Federal Rules of Civil Procedure 12(b)(6). It granted Defendants summary judgment on Plaintiff’s claim that Defendants violated copyright laws by printing copies of her book after she withdrew her consent, holding that Plaintiff had failed to establish that Defendants received written notice of her withdrawal. The district court also granted Defendants summary judgment on Plaintiff’s claim that Defendants should not be allowed to use her book to teach a course on real estate transactions.

Seventh Circuit Holdings:

• Given that the license to print Plaintiff’s book was given orally, the license may be terminated or modified orally. Oral licenses and oral terminations are valid to the extent they are allowed by state statutes of fraud.


• An author has the exclusive right to control copying of her work. Once a given copy has been sold, however, its owner may do with it as he pleases (provided that he does not create another copy or derivative work).


• Federal courts recognize claim pleading under Federal Rules of Civil Procedure 8. As such, “the possibility that facts to be adduced later, and consistent with the complaint, could prove the claim, is enough for the litigation to move forward.” The court was particularly troubled that the trial court dismissed the complaint for failure to adhere to fact pleading, stating “It is disappointing to see a federal district judge dismiss a complaint for failure to adhere to a fact-pleading model that federal practice abrogated almost 70 years ago.” Instead, dismissal under Rule 12(b)(6) is reserved for complaints that do not state legally cognizable claims.
  

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Patent Claims Were Not Objectively Baseless and Were Remanded for Infringement Consideration

Case: Honeywell International v. Universal Avionics, Case No. 05-1112 (Fed. Cir. May 25, 2007)

The Two Sentence Summary: Plaintiff's pre-suit investigation was adequate, and its infringement allegations were supported so that counterclaims alleging bad faith patent claims were properly dismissed. The panel remanded the patent claims for analysis of infringement after modifying claim constructions and rejecting on-sale bar and inequitable conduct defenses.


What They Were Fighting About: Honeywell had patents on "look ahead" terrain warning systems for commercial aircraft. The district court had granted summary judgment of non-infringement on the patents after claim construction and had also held that the patents were not invalid due to the on sale bar.

Federal Circuit Holdings:

• The district court correctly construed the term "look ahead distance" to depend upon the time for an evasive maneuver, but factual questions precluded summary judgment as to infringement on this issue.


• The district court erred in construing the term "signals representative of" too narrowly. The term should be construed broadly in accordance with the common meaning of the term.


• The district court incorrectly added additional limitations to the term "alert envelope" that were not within the claim language.


• The district court erred in construing a height term as requiring a numeric limitation when a later dependent claim added a numeric limitation. The limitation in the later dependent claim gave rise to a presumption that the limitation in question was not present in the independent claim.


• The district court acted within its discretion in excluding expert testimony on the doctrine of equivalents that had not been disclosed in the expert report and as to which the expert had expressed no opinion earlier in his deposition.


• The district court properly exercised its discretion to rule on defendant's declaratory judgment claim as to invalidity of claims that had been withdrawn by plaintiffs. Because these independent claims were referenced by dependent claims that were still in the litigation, there was an actual case and controversy as to those claims and declaratory judgment jurisdiction was proper.


• The district court did not err in finding after a trial that there was no on sale bar under 35 U.S.C. § 102(b). The use of the device had been experimental prior to the critical date.


• There was no bar under section 102(b) for showing the experimental system to customers and a reporter who wrote an article before the 102(b) critical date.


• The district court did not err in refusing to find inequitable conduct regarding the patents. Applicant had adequately disclosed its pre-critical date experimental use and commercial activities regarding the patents. Additional disclosures would have been cumulative.


• The panel affirmed the district court's finding that plaintiff's litigation was not a sham because plaintiff had conducted a reasonable pre-suit investigation and its claims were not objectively baseless.
  
  

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Inequitable Conduct Found Due to Non-Disclosure of Events from Co-Pending Patent Applications

Case: McKesson Info. Solutions, Inc. v. Bridge Med., Inc., No. 2006-1517 (Fed. Cir. 5/18/07)

The One Sentence Summary: A patent for matching patients with their medicines was invalidated due to a finding of inequitable conduct based upon non-disclosure of events from co-pending patent applications.


Federal Circuit Holdings:

• The district court correctly found that a non-disclosed patent, Baker, would have been important to the patent examiner and should have been disclosed. It was not cumulative because it had a more thorough explanation of the relevant technology than another patent(11 columns instead of 2) before the examiner.
• The non-disclosed patent did not need to be invalidating to be material.
• The fact that the applicant's attorney learned of the Baker patent shortly after making related statements to the examiner supported a finding that he must have understood the materiality and that he intentionally withheld it.
• The testimony of the attorney speculating as to why he withheld the undisclosed patent was not supported by evidence and the district court could ignore it.
• Another examiner's rejection of similar claims in a co-pending application was material and should have been disclosed.
• The applicant's attorney should have notified the examiner of the allowance of a co-pending application that could have formed the basis of a double-patenting rejection.
  
  

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